Taking Steps to Correct Errors on Your Tax Return

How to correct your tax returns with ease

Preparing and understanding tax returns can be complex and challenging. Even professionals sometimes struggle to ensure every number and detail is accurate. Often, mistakes are only noticed after submitting the return online or sending it via mail, or worse, when the IRS sends a notice regarding discrepancies. If you find yourself in this situation, it's crucial to know what to do next.

Fortunately, there are several actions you can take. However, if you are unsure where to begin, it is advisable to seek assistance from a tax resolution professional. Our team of experts specializes in navigating the complexities of the IRS, providing you with peace of mind. Whether you owe back taxes or have outstanding tax debt, contact us today for a free consultation.

Common Types of Errors

The IRS scrutinizes each tax return for various red flags. Here are three common mistakes made by taxpayers:

Not reporting all income: Regardless of the amount earned, it is essential to report all income accurately. Unless you run a strictly cash-based business (which raises a red flag), the IRS receives duplicate copies of W-2, 1099, and other forms detailing your income. If your reported income does not match the IRS records, it can raise suspicion.
Overstating business expenses: Depending on your occupation, there may be legitimate expenses that your employer does not reimburse. If you operate a business, there might be a temptation to inflate deductions. While some deductions may be valid, it's important to adhere to the approved list and avoid claiming deductions far beyond the norm. Consult with a tax professional to ensure compliance with tax laws and prevent improper deductions on your return.
Math errors: Whether filing electronically or using paper forms, your information is entered into a computer system. Computers excel at mathematical calculations, making any errors or discrepancies stand out. While a math error may not necessarily lead to an audit, it can attract unwanted attention. Double-checking your returns and involving a qualified tax professional can help prevent such issues.

Filing an Amended Return - The 1040X

Individual income tax returns can be amended within three years of the original due date by filing IRS Form 1040X. This form allows you to provide the IRS with information on what was originally filed, the corrected details, and the reason for the changes. Additionally, it enables adjustments to personal exemptions, such as correcting errors related to dependents.

Here are a few tips for filing the 1040X form:

Use a separate 1040X form for each year requiring corrections and send each form in its own envelope.
Clearly indicate the tax year at the top of each form.
Explain the changes and reasons for correction on the back of the form. Include any schedules, forms, or supporting documentation affected by the changes.
If your federal corrections impact your state taxes, submit a corrected return for the relevant state as well.

It is strongly recommended to consult a tax resolution professional for assistance with your amended return. They can help file multiple years of unfiled tax returns, facilitate settling for a reduced amount, and provide valuable guidance to help you avoid tax-related troubles.

You Have 3 Years

Many taxpayers only discover errors in their tax returns when preparing subsequent year's returns. These mistakes may come to light during discussions with tax preparers or through personal review. There is no specific time limit for correcting a return; amendments can be made whenever an error is noticed. However, the IRS generally accepts corrections up to three years after the original return's filing date.

The 1040X is a Paper-Only Form

Even if you typically e-file your tax returns, the 1040X form must be filed as a physical paper form. The IRS does not currently accept electronic filing of the 1040X form. Pay attention to the correct mailing address for the form, as it differs from the address for regular returns.

If Correcting Mistakes Results in Additional Taxes Owed

If you discover a mistake on your tax return that underreports your tax liability, it is crucial to amend your return promptly. The IRS is likely to uncover significant discrepancies, such as unreported income from freelancing or self-employment, and may impose interest and penalties on the outstanding tax owed. By proactively addressing the error, you can minimize the impact of interest charges.

If you anticipate having substantial tax debt and owe more than $10,000 to the IRS or state and cannot afford to pay in full, lump sum, it is advisable to contact our firm for assistance. We specialize in helping individuals find tax relief and, in some cases, settle their tax debt for a fraction of the total amount owed. Don't hesitate to reach out to us for a resolution.

Correcting errors on your tax return is essential to maintain compliance with IRS regulations and minimize potential penalties. By taking the necessary steps to amend your return with the assistance of a tax resolution professional, you can ensure accuracy and alleviate any concerns regarding your tax situation.

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Understanding the LT11 Letter: Take Immediate Action

By 7066766659 • December 30, 2024

Receiving an LT11 letter from the IRS can be incredibly unsettling. This notice is a serious warning that the IRS is prepared to take tough action to collect unpaid taxes. If you’ve received this letter, it’s important to understand what it means and why you need to act quickly. What is an LT11 Letter? An LT11 letter, also known as the "Final Notice of Intent to Levy and Notice of Your Right to a Hearing," is sent by the IRS when you have unpaid taxes and haven’t responded to previous notices. This letter means the IRS is ready to levy your assets, which means they can legally take your property to pay off the tax debt. This could include money in your bank accounts, your wages, your home, or other valuable belongings. What Can Happen If You Ignore It? If you ignore an LT11 letter, the IRS can take serious actions, such as: Seizing Money from Your Bank Account: The IRS can freeze your bank accounts and take the money. Garnishing Your Wages: Your employer will have to send a portion of your paycheck to the IRS. Taking Your Property: The IRS can seize your house, car, or other valuable items. Damaging Your Credit Score: A levy or lien can hurt your credit score, making it hard to get loans or credit in the future. Why You Need to Act Quickly The LT11 letter gives you only 30 days to respond. Within this time, you have the right to request a Collection Due Process (CDP) hearing. This hearing is your chance to dispute the levy action, propose a different payment plan, or challenge the amount you owe. If you don’t act within these 30 days, the IRS will start the levy process, and your options will be very limited. The Importance of Professional Help Dealing with the IRS and resolving tax problems can be very complex, and trying to handle it on your own can lead to mistakes that might make your situation worse. A tax resolution professional has the knowledge and experience to help you navigate this challenging process. Benefits of Professional Help: Expert Negotiation: A professional can negotiate with the IRS on your behalf to secure the best possible terms. Strategic Planning: They can develop a plan to resolve your tax issues without causing financial hardship. Legal Protection: A professional ensures that your rights are protected throughout the process. If you’ve received an LT11 letter, don’t wait another moment. Contact Advantage Tax Relief immediately at 630-773-3200. Advantage Tax Relief is a skilled tax resolution firm that can help you navigate your tax issues and achieve the best possible outcome. Call Advantage Tax Relief NOW at 630-773-3200 to prevent the IRS from taking your hard-earned money and assets.

What to Do If You Have an IRS Balance: Solutions from Advantage Tax Relief

December 9, 2024

Dealing with an IRS Balance? Reach out to Advantage Tax Relief today to solve all of your IRS problems! Receive expert guidance and support from a professional expert.

How to Handle a CP523 Notice from the IRS

November 25, 2024

What is a CP523 Notice from the IRS? Receiving a CP523 notice is a serious matter. It’s an official communication from the IRS informing you that your tax installment agreement has been canceled. This typically happens when you fail to make payments or violate the terms of your repayment plan. If you’ve gotten this notice, it means the IRS is prepared to take further action, so it’s critical to understand what it means for your situation. Why You Need to Act Now A CP523 notice signals that your repayment agreement is no longer in effect. Without an active installment plan, the IRS has the authority to initiate collection actions against you, including: Wage Garnishments: The IRS can garnish your wages without additional warning. Bank Levies: They may seize funds directly from your bank account. Liens on Property: The IRS could place liens on your property, affecting your ability to sell or refinance. Ignoring the CP523 notice can lead to significant financial consequences, such as: Immediate Tax Payment Demand: You could be required to pay your entire outstanding balance in full, which can be overwhelming. Escalating Collection Efforts: The IRS can move quickly to enforce collection actions if you don’t address the notice in a timely manner. Damage to Your Credit: Unresolved tax issues can severely impact your credit, making it difficult to secure loans, credit, or even housing. Steps to Take if You Receive a CP523 Notice While receiving a CP523 notice can feel intimidating, there are clear actions you can take to prevent further issues: 1. Respond Promptly: Time is critical. The sooner you take action, the better your chances of avoiding severe consequences. 2. Review the Notice Carefully: Understand the reason your installment agreement was canceled, the amount you owe, and any deadlines for taking action. 3. Evaluate Your Financial Situation: Take stock of your finances and explore your options for resolving your debt. This might include reinstating your installment agreement, negotiating new terms, or looking into other tax relief solutions. 4. Contact the IRS: Reach out to the IRS as soon as possible to discuss your situation and find out what steps you need to take to get back on track. 5. Consider Professional Help: Navigating the IRS system can be complex, but you don’t have to do it alone. A tax professional like John Bruszewski at Advantage Tax Relief can help you negotiate with the IRS, review your options, and work toward a favorable outcome. Don’t Wait – Get Help Now Ignoring a CP523 notice can make matters worse. It's essential to act quickly and seek guidance from a trusted expert. John Bruszewski at Advantage Tax Relief is here to help you understand your options, negotiate on your behalf, and guide you through the process. Call for a Free Consultation Don’t wait until it’s too late. Call Advantage Tax Relief today at 630-773-3200 for a risk-free consultation and get the help you need to resolve your tax issues and protect your financial future.